The process of purchasing property in Kenya (Conveyancing process)

Introduction: 

The process of purchasing property in Kenya, known as conveyancing, is a complex legal undertaking that requires the expertise of a qualified advocate. The advocate's role is crucial in safeguarding the client's interests, ensuring legal compliance, and preventing fraud.

Significant processes to note when a client is purchasing property in Kenya:
 

1. Client Instructions and Engagement:

Initial Consultation:  

The advocate will meet with the client to understand their objectives, the nature of the property they intend to buy, their budget, and any other specific concerns.

Explanation of Process:  

The advocate will explain the entire conveyancing process, timelines, potential costs (fees and disbursements), and what the client needs to provide.

Letter of Engagement/Retainer Agreement:  

A formal agreement is signed between the advocate and the client, outlining the scope of services, professional fees (often guided by the Advocates Remuneration Order, 2014, as amended), payment terms, and client responsibilities. 

This ensures clarity and avoids future disputes.
 

2. Due Diligence and Property Verification (The Most Critical Stage):

Obtaining Property Documents: 

The advocate will request essential documents from the seller or their advocate, including:

• Copy of the Title Deed/Certificate of Lease.
• Seller's National ID/Passport and KRA PIN Certificate.
• Spousal consent (if the seller is married and the property is matrimonial land).
• Company registration documents (if the seller is a company).
• Rates and Rent Clearance Certificates.
• Survey map/Mutation Form (for subdivided plots).

Official Search at Lands Registry: 

The advocate conducts a formal search at the relevant Lands Registry(or Ardhisasa as applicable) to:

• Verify the registered owner of the property.
• Confirm the size and boundaries of the property.
• Ascertain the tenure (freehold or leasehold) and its unexpired term.
• Check for any encumbrances (e.g., existing mortgages, charges, cautions, caveats, easements, or court orders) that might affect the property.
• Confirm the authenticity of the title deed.

Local Authority Searches: 

To ascertain:

• Outstanding land rates and service charges from the County Government.
• Any planning restrictions or proposed developments that might affect the property's use.
• Obtain a Rates Clearance Certificate.

Company Searches (if applicable): 

If the seller is a company, a search is conducted at the Registrar of Companies to confirm its legal existence, directorship, and authority to sell. 

Physical Inspection Advice: 

The advocate advises the client to conduct a physical inspection of the property with a surveyor to confirm its actual condition, boundaries, and ensure it matches the land records, and identify any third-party occupants or encroachments.

Verification of Seller's Identity: Ensuring the seller is the legitimate owner and has the legal capacity to sell. The advocate's role here is crucial in mitigating risks such as fraudulent titles and unconsented sales.

3. Negotiation and Drafting of Sale Agreement: 

Negotiation of Terms: 

The advocate assists the client in negotiating the terms of the sale, including the purchase price, payment schedule, conditions precedent (e.g., obtaining consent), and the completion period (typically 90 days). 

Review/Drafting of Sale Agreement:

• The seller's advocate usually drafts the Sale Agreement. The buyer's advocate meticulously reviews it to ensure all clauses are fair, protect the buyer's interests, and comply with the Law of Contract Act and Land Act.
• The agreement includes details like parties, property description, purchase price, deposit amount, payment timelines, conditions for completion, default clauses, and dispute resolution mechanisms.

Execution of Sale Agreement: 

Both the buyer and seller, along with their witnesses, sign the Sale Agreement. The buyer usually pays a deposit (commonly 10% of the purchase price), which is often held by the seller's advocate in a client account as a stakeholder. The advocate ensures these funds are held securely until the conditions for their release are met.
 

4. Obtaining Consents and Clearances: 

Land Control Board (LCB) Consent: 

If the property is agricultural land, the seller's advocate applies for consent from the Land Control Board. This is a mandatory step, and without it, the transaction is null and void. The advocate ensures all necessary documents are prepared and attends the LCB meeting.

Rates and Rent Clearance Certificates: 

The advocate ensures that all outstanding land rates and land rent (for leasehold properties) are cleared by the seller, and the relevant clearance certificates are obtained.
 

5. Valuation and Stamp Duty Payment: 

Valuation: The buyer's advocate usually advises on a government valuation (or private valuation) of the property. This valuation is crucial for calculating stamp duty.

Stamp Duty Assessment and Payment: The advocate assists the client in computing, assessing, and paying stamp duty to the Kenya Revenue Authority (KRA). This is a mandatory tax (4% of the value for urban properties, 2% for rural/agricultural properties). The documents (Sale Agreement and Transfer Forms) are stamped to legalize them.
 

6. Transfer and Registration: 

Drafting Transfer Documents: The buyer's advocate drafts the necessary Transfer Forms (e.g., Form L.R. or others depending on the land regime).

Execution of Transfer: The Transfer Forms are executed by both the buyer and seller in the presence of the advocate, who attests to the signatures.

Lodging Documents for Registration: Once all conditions are met, all completed and stamped documents are lodged at the relevant Lands Registry for registration. These typically include:

• Original Title Deed/Certificate of Lease.
• Duly executed and stamped Transfer Forms.
• Consent to Transfer (if applicable, e.g., LCB consent)
• Rates Clearance Certificate.
• Land Rent Clearance Certificate (if applicable).
• KRA PIN Certificates of both parties.
• National IDs/Passports of both parties.
• Passport photos of both parties.
• Payment receipts for stamp duty.

Follow-up and Issuance of New Title: The advocate continuously follows up with the Lands Registry to ensure the transfer is processed efficiently. Once registered, a new Title Deed or Certificate of Lease is issued in the buyer's name.

7. Post-Completion Activities: 

Handover of Original Title: The advocate hands over the original Title Deed/Certificate of Lease to the client.

Post-Registration Search: Conducts a final search to confirm that the property has been registered in the client's name and is free from any new encumbrances.

Advisory: Advise the client on subsequent steps, such as taking possession, obtaining necessary utility connections, or any further developments like obtaining construction permits (if applicable). 

Custodian of Documents: The advocate may hold original completion documents in their strong room for safekeeping on behalf of the client, as agreed.

By meticulously following these processes, the advocate ensures that the client acquires a legally sound title to the property, minimizing risks and protecting their investment.

To reach to our team of Advocates, feel free to drop a comment or contact details at the "Comment" Section on this website.